Extra COD Charges, Delayed Refunds: Govt Asks If E-Commerce Platforms Like Amazon, Flipkart Are Playing Fair

The Indian government has reportedly begun examining whether the cash-on-delivery (COD) charges imposed by online retailers like Amazon and Flipkart, designed to push consumers into choosing prepaid payment methods, and why refunds are often delayed or denied when prepaid orders are cancelled.

According to two people aware of the matter told Mint, that the Ministry of Consumer Affairs is reviewing a rising number of consumer complaints related to these issues.

While the details of the probe are not public yet, the ministry is expected to soon hold consultations with major e-commerce companies, consumer rights organizations, and industry associations to find a solution that balances operational costs with consumer protection, reported Mint.

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Many online shoppers have reported feeling pressured to avoid COD due to the extra charges levied on such transactions. Amazon reportedly charges between ₹7 to ₹10 per COD order, while Flipkart and FirstCry are said to impose around ₹10.

These COD surcharges come on top of platform fees, which vary across websites, leading to a perception that these charges are being used as a subtle nudge to promote digital payments. A government official noted that such tactics could raise concerns under consumer rights laws if found to be unfair or misleading, according to Mint.

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In addition to COD charges, the ministry is also scrutinizing delays in refunding payments when customers cancel prepaid orders. Several users have complained that even when orders are cancelled before dispatch, refunds are not processed immediately or are denied without clear explanations. This has raised questions about transparency and accountability in how online platforms manage payment reversals.

The government aims to ensure that consumers are not disadvantaged by the operational practices of online marketplaces. If necessary, the ministry may propose new guidelines or amendments to the existing Consumer Protection (E-Commerce) Rules to strengthen safeguards around pricing transparency, cancellation policies, and refund timelines.